Employment Relations in the Hospitality and Tourism Industries

Rosemary Lucas

• Publisher: Routledge
• Year: 2004
• eBook ISBN: 9781134432981
• Topic: Business
• Subtopic: Business General
• Index: Business

Uniquely combining employment relations and the hospitality and tourism fields, this book draws on recently published sources to give readers a comprehensive and internationally comparative perspective on the subject area. It boldly extends the traditional analysis of employment relations by integrating new topics such as the role of customers and

1 Whither employment relations and hospitality?

Learning objectives

By the end of this chapter you should be able to:

• appreciate the historical development of employment relations and its relevance as a field of study;
• understand how employment relations in the HI are defined;
• explain how managerial frames of reference affect the way we see employment relations;
• understand the nature of the rules of employment, and how their regulation is underpinned by power relationships;
• appreciate the influence of the wider international and national contexts on the employment relationship.

Historical development of employment relations

Interest in employment, now the preserve of many individuals, but not all, in western economies, derives from the fact that ‘Work dominates the lives of men and women … the management of employees both individually and collectively remains a central feature of organisational life’ (Blyton and Turnbull, 1998: 3). Before beginning an examination of employment relations in the HI, it is useful to outline the historical development of employment relations¹ and their relevance as a field of study, thereby introducing the reader to some of the key terms used throughout the book.

Establishing the collective model

According to Hyman (1989) academic interest in employment relations was prompted when the potential stability of social order was put under threat by militant behaviour among a growing number of unionized industrial manual workers, who were no longer prepared to tolerate very bad terms and conditions of employment. This challenge to social order, which began in the late nineteenth century, was met by two responses. First, the social welfare reformers, in keeping with their predecessors who had successfully campaigned for health and safety legislation earlier in the nineteenth century, urged legal intervention to improve the conditions under which work was performed and the terms under which it was undertaken. They achieved limited success, notably the introduction of minimum wages in four manufacturing industries in 1906.²

The second and main response, which was to characterize public policy on employment relations until 1979, was that voluntary collective bargaining provided the best means to secure order within employer–employee relations. Collective bargaining is a process whereby employers and trade unions negotiate the substantive terms and conditions of employment, such as pay and hours of work, and procedural agreements that facilitate the resolution of disputes between the parties. Industrial relations, the term in usage at the time, focused on the institutions of collective bargaining in fixing these ‘rules’ of employment, largely within maledominated manufacturing environments. Collective agreements were not legally enforceable.

While public services such as the health service, the railways and the coal mines came to assume importance in industrial relations following the mass nationalization programme after the Second World War, private services remained the ‘Cinderella’ of British industrial relations. Even though the growth of private services such as retailing and hospitality opened up more employment opportunities for women, whose main work opportunities had been in domestic service in the earlier part of the century, unregulated, female service work was deemed not to be part of industrial relations. Even so, the lack of collective bargaining arrangements prompted the Labour government to extend the scope of minimum wage legislation to embrace these sectors. Thus in 1945 the newly named wages councils, a form of ‘state-sponsored’ collective bargaining, were able to fix remuneration (any pay including basic pay, overtime and shift premiums) and paid holidays for many ‘unprotected’ workers in private services.

Collective consensus and a more active state

Greater state intervention in employment matters was a response by both Conservative and Labour governments to the mounting economic difficulties of the 1960s, e.g. statutory and voluntary incomes policies. State intervention also constituted a response to the perceived failure of voluntary collective bargaining to provide an effective regulatory mechanism for social order and social welfare, notably to protect the interests of the low-paid, many of whom were women. This perceived breakdown prompted the government to appoint a Royal Commission in 1965, the Donovan Commission (1968), to investigate the state of employer–worker relations, in order to recommend how the ‘system’ could be reformed. The Donovan prescription sought to maintain voluntarism, and placed the onus on employers to improve the rules of employment, and to introduce more formal procedures for the resolution of disputes.

Donovan’s prescription was not universal, because it could not be applied to large parts of private services comprising small, informally managed, non-union workplaces, where female and part-time employment was concentrated (Lucas, 1986: 97–131). A different approach based on legal intervention in employment relations began to develop, based on employment protection for individual employees. Early employment protection rights of the 1960s included the right to a written statement of terms and conditions of employment, statutory redundancy pay and equal pay. Workers lacking the protection of a trade union and with no recourse to formal workplace procedures could resolve employment disputes, that is those in scope of the law, by going to an industrial (now employment) tribunal.

The 1970s represented a significant turning point for legal intervention in employment relations. Britain joined the European Economic Community (EEC) in 1972. This heralded the start of a wide-ranging programme designed to establish a floor of new rights relating to matters including unfair dismissal, maternity leave, sex and race discrimination and health and safety at work. The main beneficiaries were to be those working in private services.

A challenge to tradition: the Thatcher and Major years

Events of the 1980s and early 1990s effectively killed the model of voluntary collective bargaining. In pursuit of an overriding objective to deregulate the labour market and employment, successive Conservative governments systematically dismantled institutions deemed to interfere with the free working of the labour market, notably the trade unions and wages councils. Paradoxically, in spite of the government’s antipathy to the EU’s social action programme and subsequent opt-out of the social chapter, the EU continued to influence British employment relations in a significant way. Rulings from the European Court of Justice (ECJ) obliged Britain to introduce new legislation, e.g. the transfer of undertakings³ or the amendment of existing legislation relating to equal pay and sex discrimination. The floor of employment rights was both strengthened and extended.

Managers reasserted the right to manage increasingly flexible and non-standard workers under the banner of ‘managerialism’, in workplaces that might be labelled ‘bleak houses’ (Sisson, 1993). An alternative version of management thinking stressed the benefits of ‘commitment’ over ‘control’ (Walton, 1985). Both approaches came to signify the two variants of HRM. ‘Soft’ HRM emphasized fostering commitment, improving quality and developing the human resource, whereas ‘hard’ HRM was contingent and calculating in its utilization of the human resource (Hendry and Pettigrew, 1986; Storey, 1989, 1992). If organizations were to survive the effects of adverse economic conditions, globalization and increasing competition, the imperative was to integrate HRM within business strategy (Huselid, 1995; Storey, 1995; Guest and Hoque, 1996).

The impact of HRM on industrial relations was widely debated (Guest, 1987, 1989; Purcell and Ahlstrand, 1989; Guest and Hoque, 1996). Other key issues in the wider academic debate included the extent of continuity and change in industrial relations, the sharp decline in trade union membership, the impact of deregulation and whether employment relations could be re-regulated.

New Labour: new hope?

By the mid-1990s individual relationships were catapulted firmly to the forefront of analysis of the employment relationship (Edwards, 1995; Beardwell, 1996). Recognition of this change had been apparent from WIRS in 1990 (Millward et al., 1992), perhaps most notably within the HI (Lucas, 1995a, 1996a). HI managers are free to exercise a high degree of managerial prerogative in the absence of unorganized labour, termed ‘unbridled individualism’ (Lucas, 1996a).

The election of a Labour government for the first time in nearly 20 years in 1997 raised expectations that there would be a new agenda for employment relations, although Heery’s (1997: 107) assessment was that ‘it is extremely doubtful whether New Labour will issue in a new industrial relations’. New Labour’s stakeholder economy is based on fairness and partnership. Fairness at work is to be achieved in two ways. The government signed up to the EU social chapter and set about introducing a new floor of minimum employment standards, including a National Minimum Wage (NMW), and family-friendly measures. Social partnership between employers and workers is designed to foster a more consensual and cooperative relationship between employers and employees. The Low Pay Commission (LPC), whose first task was to recommend the initial rate of the NMW, provides an early manifestation of social partnership comprising employer, worker and independent representatives. Although many of the Conservatives’ trade union reforms remain in place, the introduction of statutory trade union recognition procedures might help reverse the steep decline in trade union membership.

By the time of WERS in 1998 the system of collective representation had crumbled ‘to such an extent that it no longer represented the dominant model’ (Millward et al., 2000: 234). In reality employment relations could conform to different and diverse patterns (Millward et al., 2000). Private service establishments employing 25 or more employees were numerically more important than private sector manufacturing and the public sector put together. Their share of employment increased from 26 per cent in 1980 to 44 per cent in 1998, reinforcing the point that alternative ways to view and reform employment relations were long overdue, particularly in circumstances of ‘bleak house’ (Sisson, 1993) or ‘black hole’ employment (Guest and Conway, 1999). Although we find these terms wanting in respect of the HI, they highlight the relevance of the industry as a unit of analysis. Consequently we shall show how these types of workplaces throw up major problems for employment relations reform.

Agenda for the twenty-first century

In calling for a new industrial relations paradigm, Ackers (2002) now argues that the new problem of social order focuses on links between employment and society, and that such a link provides an explicit ethical framework for policies like social partnership. He rejects the traditional industrial relations notion of workers as unattached individuals in their out-of-work lives, and argues that industrial relations can no longer ignore issues of work–life balance and corporate social responsibility. Indeed social concerns underpin ‘Fairness at Work’ and the ‘Welfare to Work’ programme (DTI, 1998), and family-friendly issues are a new addition to WERS. Hence a new definition of industrial relations as neo-pluralism:

Employment relations is the study of the social institutions involved in the normative regulation of the employment relationship and business’s interaction with other stakeholders in society.

(Ackers, 2002: 18)

Thus Ackers rejects as inappropriate Kelly’s (1997) industrial relations paradigm for the twenty-first century, which derives from a redefinition of Marxism based on socialism, workers’ mobilization, economic militancy and strikes, and organized labour.

Edwards (2003a) identifies three pressing issues in contemporary employment relations: ‘high commitment’ or ‘high involvement’ work systems, the international context and economic performance. The first, although interesting, is very rarely found anywhere in Britain. Its alternative of ‘low skills’ and ‘low wages’ strikes right at the heart of much hospitality employment. This links to economic performance, where the absence of collective bargaining is likely to have contributed to income inequality and the perpetuation of low pay in the HI, although pay may be subsidized by the state through social security and taxation. The further subsidy of low pay through tips as a defensible employment practice is a matter of conjecture. We shall also explore if particular employment relations practices can be linked to successful performance outcomes. The international context and its implications for employment relations in the HI are considered below and in subsequent chapters.

A fourth pressing issue can be added. Employment relations discourse needs to recognize that prejudice and bias have been built into much of the theoretical and practical analysis, thus distorting its perspective. Gender is not the only example, but may be the most obvious. In spite of an increasing interest in what may be described as ‘women’s issues’, such as (un)equal pay and employment opportunities, family-friendly policies and sexual harassment, one major barrier to understanding employment relations is an assumption that they are gender neutral (Forrest, 1993; Wajcman, 2000). The argument is that adding women’s issues to the agenda is simply not good enough. Management, trade unions and the state are not gender neutral (Dickens, 1997, 1998; Edwards, 2003a), and therefore we need to recognize the gendered characteristics of the employment relationship and work and integrate this into our understanding of the field of employment relations. Other ‘omissions’ include age, ethnicity and the role of customers. We shall explore these issues throughout the book where it is possible or relevant to do so.

All these issues were placed under review in The Future of Work Programme launched by the ESRC in 1998. The Programme has supported 27 projects designed to rectify gaps in our understanding and improve the quality of information available to the policy-makers in the UK. Topics under investigation have included the future of unskilled work, business re-engineering and performance, the changing position of ethnic minorities and women in the labour market, the future for trade unions and the changing nature of the employment relationship (Taylor, 2001a,b, 2002a,b,c).

What are employment relations in the hospitality industry?

Three terms denote the relations between managers and workers in the employment relationship – industrial relations, employee relations and employment relations (Hollinshead et al., 1999: 7; Salamon, 2000: 4–5; Leat, 2001: 5–7; Rose, 2001: 5–7). These terms are often used interchangeably, but can also convey subtle differences of meaning. They may coincide with other fields of academic inquiry and practical activity concerned with ‘people management’, namely personnel management and HRM.

Edwards (2003a: 1–36) provides an insightful analysis of the employment relationship, taking as his starting point the distinction made by Fox (1966) and Flanders (1974) between market relations and managerial relations. At the root is an economic exchange between capital (the employer) and labour (the worker), in which the price of labour is set as a contract of employment. In this economic exchange between the buyer (employer) and seller (worker) of labour, the parties do not share equal power resources. In common law the employer has the right to command and the employee has a duty to obey. The commodity at the heart of the bargain is the worker’s labour power. The employer will seek to maximize control over that ‘labour process’ in order to generate a surplus as profit (Braverman, 1974; Friedman, 1977).

The employment relationship, as an exchange and in recognition of its broader context, has also been termed the effort–reward bargain: ‘an economic, social and political relationship, for which employees provide manual and mental labour in return for rewards allotted by employers’ (Gospel and Palmer, 1993: 3).

Labour only becomes useful if it can be persuaded by management to work, but this is only the beginning. Workers must demonstrate commitment, continue working to the required standards, and not deviate from those standards. In other words workers must follow ‘rules’, otherwise management may need to deploy corrective or punitive measures via the disciplinary procedure.

Bonamy and May (1997) argue that a weakening of employment relationships since the 1970s has given rise to the emergence of employment as a service relationship. This relationship demands increased recognition of the professional qualities of the ‘autonomous’ worker, which poses problems of incompatibility with an employment contract built upon subordination. Pay is determined by time worked, whilst idl...

Table of contents

• Cover Page
• Routledge studies in employment relations
• Title Page
• Copyright Page
• Illustrations
• Acknowledgements
• Abbreviations
• Introduction
• 1 Whither employment relations and hospitality?
• 2 Employment and work
• 3 The role of management in employment relations
• 4 Resourcing, development and fair treatment
• 5 Pay, reward and performance
• 6 Representation, participation and involvement
• 7 Employment law and dispute resolution
• 8 What do the workers think?
• 9 Conclusions and future issues
• Appendix 1: Background characteristics of the WERS98 sample
• Appendix 2: Employment relations practices and outcomes
• Notes
• References